CS Executive · Capital Market and Securities Laws · Mutual Funds
Orchid Mutual Fund, a registered mutual fund, fails to refund the application monies paid by investors within the period specified in the regulations. Under Section 15D, which clause addresses this default?
Clause (e) of Section 15D applies. It penalises a registered collective investment scheme, including a mutual fund, that fails to refund investors' application monies within the period specified in the regulations. The other clauses cover different defaults such as unit certificates or investment.
- AClause (d), failure to despatch unit certificates
- BClause (e), failure to refund application monies within the period specified in the regulationsCorrect
- CClause (f), failure to invest money collected in the manner specified
- DClause (a), operating without registration
Explanation
Clause (e) of Section 15D specifically deals with a registered fund failing to refund application monies within the regulatory period. Clause (d) is about despatching unit certificates, clause (f) about investing collected money in the specified manner or time, and clause (a) about lack of registration, which is not the case here.
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